Irvine Housing Blog

Very well said Perspective.  I will essentially never be able to buy a house, and I’m a goddamned lawyer making 6 figures.  Here in the bay area, I can look forward to a middle unit townhouse in South San Jose for $600K because that’s the only thing I could save 20% of within a reasonable amount of time.  $120K is a year’s salary for me, so saving that kind of money after rent + student loan payments + necessities/ obligations($4k/ month) I can save $120K in about 5 years.  And that’s so I can get a middle unit townhouse in South San Jose and have a 75 minute commute to go 20 miles to work.  Oh, and $300/ month in HOA.

We are long time readers, first time repliers.  My Wife and I bought a small condo back in January 1998 here in Los Angeles County (previously lived in Riverside County).  The move was important as it allowed me to live considerably closer to my newly acquired job.  We bought the condo knowing that the price was well below our income (even though our realtor encouraged us to buy something bigger).  Well, I became engrossed in my new career (engineering manager) as did my Wife (now a principal at a middle school).  The years rolled past and we began to question ‘How is everyone able to buy all the nice toys?’  We are the couple that Perspective is inquiring about.  We are quiet, ultra-conservative and boring.  We have lived so far below our means that the only remaining debt is our small mortgage balance, which we will be retiring in December 2010 (I am 47 and my Wife is 45).  BTW:  We do NOT have any Pergraniteel in our small humble abode.  Once the mortgage is retired, we will then save to remodel our little place, humble as it is.

Send them to my email address. 

In 2004-2007 my wife and I were in the top few percent of income in LA, and we couldn’t find a decent house we could afford.  “there couldn’t possibly be this many rich people” we said.

We have stayed renters about 6 years longer than we wanted to.  The prices in the areas we are looking at are only back to the mildly insane 2003 levels.  If we stretch and put down a lot of money, we can afford to buy a house I easily lived in as a renter in the 1990s.  Of course, we are likely to lose more than 30% if we buy now.

This may be one of the cruel problems of the near future.  Both dropping home prices and large downpayments, wiping out savings of responsible people.  I figure that if we buy now we will lose $250-400k within three years.

You’re also 12 feet tall and from Mars.  To covet is to want something that belongs to someone else.  Does the home in the article really belong to the people that live there, or does it belong to the bank?  Wanting material things you cannot afford is not a new phenomena and I can’t imagine pointing that out can be considered immoral.

You were pretty harsh with these borrowers, but I see it as a manifestation of frustration with human beings and their bubble ways. Until you stage some kickass Nuremberg rallies, invade Poland, or just build a mechanized Wehrmacht of extraordinary magnitude, I just can’t think of you in that Hitler sort of way.

I am usually not wise in the ways of such things, but I know better than to try to warn friends and relatives during a bubble: they’re going to do what they’re going to do. And if you’re proven right, and they lose everything, you will be hated.

That said, I did have a couple of weak moments. At one restaurant meal four years ago, a friend bubbled on about the five rental properties she was purchasing with pico-downpayments. I asked her (a) if she had heard that the worst time to get into something is when it’s the topic of discussion at most social gatherings, and (b) if she could recall many recent gatherings at which nobody mentioned real estate. She wasn’t interested in my killjoy attitude.

Anyway, now she’s bankrupt. Why? Because she’s a stupid bitch. Sorry: a sheep is a sheep. Why lie, when the consequences of this foolishness fall on all of us?

That reminds me: I need to look at sending some Panzer divisions into North Africa.

I have no problem paying taxes to take care of other people - many of whom are hopelessly stupid, and not just down on their luck - but it should be a basic safety net only.

Most humans will always be poorly informed and irresponsible. This will never cease to be aggravating to those of us who stop and look at human behavior.

I am not immune. I have speculated heavily in the past using leverage. In hindsight, I would not do that again, and I now prefer dying poor to earning wealth through leverage, but it took me until middle age to learn this.

NAZI were Germany’s socialist party.  The US has been practicing socialism with a US twist.  Socialize the past industrialist losses and now socialize the current bankersters losses with taxpayers dollars, but privatize the gains.

The house squatters are only asking for another piece of the pie.  Too bad the renters and responsible were not invited to dinner, but not sent the bill for dinner and desert.

The modern ant and grasshopper fable told at public school is ending with the the queen liking the lazy starving grasshopper’s music, so she invites the poor grasshopper in with all his other musician grasshopper friends.

I tend to think that the future looks pretty dim for these folks. So maybe I’m looking at things from that perspective and seeing the horror that will follow. And so beating them up here won’t serve much of a purpose. I just read what you wrote and it seems to inspire a mob mentality (think of the stoning scene in Life of Brian).

So what should be done about these people? Ideally, how should society treat these people going forward? How should things change to make you feel that things will be more fair for people like you and me going forward? How should things be so that you’d feel better?

Though I agree with you in general -  “People like these fools and millions more with the same train of thought ruined it for us normal, hard working, money saving people” is wrong.  Some of us saw this coming and made a mint. 

Yeah, I get mad at some of the stupidity and aftermath, but overall - thank you bubble.

FH

“I like the way he writes.  It is full of piss and vinegar.  We need more emotional writings, and less bland PC crap”

Yes.

Sometimes fair reporting is not balanced.  Sometimes fair means calling people whatever they might be: clueless, entitled, dishonest, opportunist, etc., as the case may be.

Yes,
Remember that NY Times reporter and his book “Busted”? Edmund L. Andrews.

While many people took exception to his sweeping under the rug the foolishness and financial transgressions of his wife, he’s totally self-aware of how obvious the bubble should have been to him based on the insanity of the loans he got.

And when interest rates go up and he needs to move?

Rent for a while longer and buy when the gov has run through the whole 9 yards.

That’s no news to me. Flash on this:

I left HB because I lost my job. It was easy because I was renting; no worries about losing the umpteen thousand because I got into a loan into a declining market where renters are hard to find. I was very lucky to find a better job, but I had to move away—and FAST too.

So you buy this $530k then, since you think it’s such a great deal.—Like I said, I’m happy and comfortable saving, waiting, renting, paying for every single month I stay now every where I’ve been. I’m a free man. I owe nothing. I save much.

Tomorrow you might think that house will be worth $550k. And maybe all the unemployment, lack of federal supports on prices and vast inventories of foreclosures will not change that.

You have my story, what’s yours?

$530K in Thousand Oaks?  Yikes. Stupid is as stupid does I guess.

Coming up on the 10 o’clock newscast: A $530,000 home - is it soon to be a $470,000 home, or a $400,000 home?

Hi IrvineRenter,

I am a long time reader and as of today, a first time replier.  I simply HAD to respond to your question: “Is frugality and self-restraint dead?”  I am happy to report with an emphatic “NO, it is not dead.  It is alive and well!”  Granted, my Wife and I are probably not the norm, but we (in our humble opinion) are frugal and do in fact practice self-restraint.  We bought in January 1998 and we live in a small condo - the price at the time of purchase relative to our income was ‘very affordable.’  We have been very fortunate that our income since 1998 has steadily increased and we have been busy paying down the debt.  And NO, we did not take out any HELOCs nor have we re-financed the original loan, using our condo as a money-making machine.  Finally, our humble abode does NOT have any pergraniteel (‘quaint’ is the proper term).  Recall the bumper sticker “It’s ugly but its paid for”?  This describes our home.  In fact it does need to be seriously renovated.  We refuse to do this until we retire the only remaining debt in our lives (by Dec. 2010).  Then, and only then will we save real money via earned income and then spend some (not all) of those dollars to renovate the place.  Because we have lived so far below our means we have been steadily saving and investing in tax-deferred, tax-free and taxable accounts, car fund, emergency fund, etc.  Just wanted to provide feedback that frugality and self-restraint is alive and well.  We are probably a humble and modest lot, which is maybe why you don’t hear much from us. 

Hootie

granted i’m not exactly buying pergraniteel or jetting off to europe, it means i’ll substitute ramen and frozen pizzas for actual food and i’ll properly maintain my late model honda instead of praying each time i turn the keys.

and it’ll mean i can work less and focus on school.

so i’m guilted but not at the same time…makes sense?

Incorrect, I’ve read the fine print…it’s not a set dollar amount, it’s how much debt you have relative to income. The law was written with doctors, lawyers, and other high earners in mind where there exists a huge disparity between public and private.

It’s technically the combination between IBR and PSLF that results in payments capped at ~10% of income and forgiveness after 10 years of the remainder.

Trust me, I’ve read this thing inside and out, there is no cut-off like a tax credit/deduction.

nudy bar stimulus is something i can completely get behind.